ServisFirst Bancshares(US:SFBS)2023-11-03 19:03Financial Performance - Net income available to common stockholders for Q3 2023 was $53.3 million, a decrease of $10.7 million or 16.7% from $64.0 million in Q3 2022[114]. - Basic and diluted earnings per common share for Q3 2023 were both $0.98, compared to $1.18 and $1.17 in Q3 2022[114]. - Net interest income for Q3 2023 was $99.7 million, a decrease of $26.7 million or 21% from Q3 2022[116]. - Total non-interest income decreased by 9.0% to $8.135 million for Q3 2023 compared to $8.939 million in Q3 2022[183]. - Net credit card income decreased by $80,000 to $2.5 million for Q3 2023, and by $1.0 million to $6.6 million for the nine months ended September 30, 2023[185]. - Income tax expense was $8.5 million for Q3 2023, down from $13.0 million in Q3 2022, and $32.6 million for the nine months, compared to $40.9 million in the same period last year[189]. Asset and Liability Management - As of September 30, 2023, consolidated total assets increased to $16.0 billion, up $1.4 billion or 9.9% from $14.6 billion at December 31, 2022[113]. - Total loans decreased to $11.6 billion, down $46.8 million or 0.4% from $11.7 billion at December 31, 2022[125]. - Total deposits rose to $13.1 billion, an increase of $1.6 billion or 13.8% from $11.5 billion at December 31, 2022[113]. - The company had approximately $8.5 billion in uninsured deposits as of September 30, 2023, compared to $7.7 billion at December 31, 2022[140]. - Total stockholders' equity attributable to the company was $1.40 billion, or 9.04% of total assets, as of September 30, 2023, up from $1.30 billion or 8.89% at December 31, 2022[150]. Credit Quality - The allowance for credit losses is believed adequate to absorb all expected future losses over the contractual life of the loans in the portfolio[126]. - Nonperforming loans increased to $22.6 million at September 30, 2023, from $17.8 million at December 31, 2022, indicating a rise of 27%[133]. - Total charge-offs for the three months ended September 30, 2023, were $5,143, compared to $3,333 in the same period of 2022, representing a 54% increase[130]. - The total allowance for credit losses at the end of the period was $152,247, which is 1.31% of total loans[132]. - Nonperforming loans increased to $21.5 million, or 0.19% of total loans, as of September 30, 2023, compared to $17.8 million, or 0.15%, at December 31, 2022[182]. Interest Income and Expense - The net interest spread in Q3 2023 was 1.63%, down from 3.25% in Q3 2022, primarily due to rising deposit costs[164]. - The taxable-equivalent yield on interest-earning assets increased to 5.65% for the three months ended September 30, 2023, from 4.30% for the same period in 2022[171]. - The cost of total interest-bearing liabilities increased to 4.02% for the three months ended September 30, 2023, from 1.05% for the same period in 2022[171]. - The average rates paid on interest-bearing liabilities increased by 293 basis points, negatively impacting net interest income[181]. - The company anticipates that net interest income will benefit in the short term following the cessation of Federal Reserve rate increases[168]. Operational Efficiency - Total noninterest expense for Q3 2023 was $41.7 million, a decrease of $1.0 million or 2.4% compared to Q3 2022, while for the nine months it increased by $69,000 or 0.1% to $119.8 million[186]. - Salaries and employee benefits increased by $393,000 or 2.0% to $20.1 million for Q3 2023, while decreasing by $781,000 or 1.3% to $57.9 million for the nine months[187]. - Other operating expenses decreased by $2.8 million or 26.3% to $7.8 million for Q3 2023, and by $5.4 million or 20.5% to $20.8 million for the nine months[192]. Future Outlook - The company anticipates slower loan growth due to the rising interest rate environment, impacting future performance[182]. - The company anticipates long-term sustainable growth in deposits through market share development in less mature markets[139].